This paper investigates the relationship between CEO visibility and corporate risk-Taking. The empirical results show that more visible CEOs tend to take more risk. A one-standard-deviation shock in the CEOs media exposure results in a 6.53% rise in total risk. We further investigate the channels of risk-Taking activities and find that more visible CEOs seek more R&D investments. The positive effect of CEO visibility on firm risk policies is clearly of concern to bondholders. Consistent with this view, we report that CEO visibility has a significant negative effect on firm credit ratings. Our results highlight the importance of CEO visibility on a crucial corporate outcome-the extent of corporate risk-Taking.
|Original language||English (US)|
|Journal||Quarterly Journal of Finance|
|State||Published - Sep 1 2016|
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
- Strategy and Management